Toyota plays down fears of plant closure

Toyota has reassured its 4,000 Melbourne workers their jobs are safe, for now, amid fears rising market pressures will force its Australian plant to close.

27 October 2007By Catherine Best

Toyota has reassured its 4,000 Melbourne workers their jobs are safe, for now, amid fears rising market pressures will force its Australian plant to close.

In the latest blow to Australia's multibillion-dollar car industry, Toyota has warned it could head offshore if tariffs are relaxed on top of the thriving Australian dollar.

The manufacturing union is seeking urgent discussions with Toyota and says closing its Altona plant, in Melbourne's western suburbs, would be a crippling hit for the car industry.

But Toyota spokesman Peter Griffin said it was too early to speculate about an Australian shutdown.

"I think it's premature but you have to be pragmatic about this also," he said.

"I can't give you an ironclad guarantee it will never happen, but if things occur the way they're currently slated to occur then we need to take a thorough look at our business and try and find ways to make it profitable and sustainable.

"Our priority is to keep the plant open."

Both the coalition and federal Labor have committed to a review of the car industry next year and Toyota will be pushing for a freeze on tariff cuts to keep local manufacturing alive.

Tariffs are set to be cut from 10 per cent to 5 per cent in 2010 in a move Australian car makers fear could wipe them out of international competition.

Australian Manufacturing Workers Union (AMWU) national secretary Dave Oliver said proceeding with the cuts was "madness", warning a reduction in tariffs would have a disastrous impact on the Australian car industry.

"We're extremely concerned that we've got a government that wants to reduce tariffs at a time when we've got the dollar as high as it is which will have implications across the auto and auto components sector," he said.

Mr Oliver is calling for a broader inquiry to map out a survival plan for the industry and policies to encourage investment and innovation.

"If we do form the next government of Australia at an early stage I'm going to sit down with Australia's auto industry leaders to discuss and devise a strategy for the industry's long-term future," he said.

The Victorian government wants tariffs to stay at 10 per cent until 2015.